Acacia Mining confirms start of negotiations with Tanzania govt

JOHANNESBURG (miningweekly.com) – Tanzania-based gold miner Acacia Mining’s CEO Brad Gordon on Thursday said the company would leave any disputes around back taxes for resolution during negotiations with the country’s President John Magufuli.

During a teleconference, he added that the company was not prepared to comment on earlier media reports, wherein Tanzania’s presidency was quoted as saying Acacia’s parent company, Barrick Gold was willing to reimburse money that was owed to the government.

Following the release of reports by two Presidential committees that investigated mineral exports from Tanzania, Magufuli earlier accused the miner of failing to pay billions of dollars in taxes.

According to a Bloomberg report, Barrick chairperson John Thornton met Magufuli for talks in the commercial capital, Dar es Salaam, on Wednesday, with Barrick confirming the meeting but not the details of what, if anything, had been agreed.

“We are now focused on negotiations with the government to bring about a swift resolution to this situation and that’s the focus for the President of Tanzania as well,” said Gordon.

He added that a number of issues around the country’s operating environment would be highlighted during the negotiations. “We have always sought to maintain good relations with the government and we welcome the chance now that we can enter a dialogue on these outstanding issues.

“We will work with them as we always try to do; we have similar goals for economic development in the country and it is clear from the last few months that we do need to address the lack of trust between the government and Acacia,” said Gordon during the call.

Noting that it was a good first step, he pointed out that Barrick and Acacia would follow the same process in negotiations.

Reuters on Tuesday reported that apart from the Tanzanian government’s crackdown on the export of mineral concentrates, other sectors of the economy were also being affected. Disputes so far have included one that led to the temporary shutdown of a cement plant owned by Aliko Dangote, Africa’s richest man, and the cancelling of a $500-million sugar project planned by EcoEnergy Scandinavia of Sweden.

In March, Washington-based Symbion Power said it was seeking arbitration after the Tanzanian government terminated a power purchase agreement.

Gordon reiterated that Acacia would continue to operate in the country, while it sought dialogue with the government. “At this stage, we don’t intend to change that position. All three of our mines are still operating and will do so as long as a resolution is possible,” he noted.

However, he noted that employee relations have been strained. “The mood is not good; our employees have been accused of many things over the last few weeks and their integrity has been questioned. It’s difficult for them,” he stated.

Speaking on the ongoing export ban on gold and copper, Gordon pointed out that it was unlikely the ban would be lifted quite early in negotiations, “but we will see how that develops as negotiations continue”.